Manhattan’s Other Office Shoe Starts Dropping
Dana Rubinstein April 14, 2010, 11:50 a.m.
As midtown Manhattan’s office market begins to stabilize, lower Manhattan’s office market looks to be on the verge of a long-anticipated statistical downturn.
Today’s New York Post featured an item about Youngwoo & Associates putting half of 70 Pine Street and all of 72 Wall Street—both purchased from AIG last year—on the office leasing market. That means that downtown’s market will have to absorb another 500,000 square feet of empty Class A office space, and another 325,000 square feet of empty Class B space. It looks like the surge in lower Manhattan’s vacancy rate is about to begin.
Here’s Cassidy Turley director of research Robert Sammons‘ take on the news:
If added today, [70 Pine] would jack the Downtown Class A (and yes, it is considered Class A) vacancy rate to 11.2% from the 10.3% figure at the end of March.
Now it depends on yet more Goldman space hitting the market (500,000-sf or so at 1 New York Plaza), 300,000-sf or more from Depository Trust at 55 Water Street (which will enter our figures sometime in 2012) and then, of course, the occupancy questions of Deloitte and Merrill/BofA. Beyond that you have 1 WTC and 4 WTC. Certainly Downtown was “last in” during the Downturn but it will also be “last out.”
The current Class B vacancy rate downtown is 15.6 percent. [Seventy-Two Wall] will certainly affect it, but again, if they decide to put funds into that building to upgrade it, somehow it might end up as a Class A building down the road.”